Is your house in need of repair and maintenance? Have you put off important repairs or so long that now it is no longer possible to delay them further anymore? And is the cost of repair slightly too much and you do not currently have the required funds to carry out the repairs and maintenance that is necessary? If your answer is yes to some or all of these questions then this article may give you some useful information.
The government of United States has different programs to facilitate home owners who want to carry our significant repairs but do not have the required amount of funds. You can look at several places for home repair loans; the best starting point is probably the local office of Housing and Urban Development (HUD). HUD has programs that give Home Investment Partnership program for low income earning home owners, the HUD office representative can also guide our about different homes repair loans. You can visit HUD for more details.
The second place to look for housing repair loans is the National Residential Improvement Association (NRIA). You can visit their website and fill out the registration form, provide them the details of your property and other relevant detail about the repairs and maintenance that you need to carry out. The representative of NRIA will then contact you with different options and programs that they find you eligible for. You can go to the website of NRIA by clicking here and fill out a simple form, provide all the relevant details and a representative will contact you with a couple of days to take you through the process of a housing repair loan.
Home Improvement and Repair Loans
Although this is typically not a home repair loan but it can be considered as one. The FHA 203(k) loan is a type of government backed mortgaged offered by the government for home purchase and home repairs, maintenance and improvement. The aim of the government through the provision of this loan is to encourage low to middle income earning individuals to purchase properties that are in dire and immediate need of repair before moving into the property.
The mortgage cost includes the cost of the house and the repairs and maintenance required. The loan is processed through private lending institutions but the mortgage is issued with a government backed surety and so it carries a lower rate of interest and terms and conditions that are more flexible than conventionally issued mortgages.
Streamline 203(k) :Minimal Repairs
Properties that do not require a lot of work are issued with a loan under the streamline 201(k) program. Under this program repairs are valued at maximum $35,000 and this does not include structural work and adding new rooms, the property in question must also be habitable throughout the renovation period. If the property is in such a condition that it cannot be lived in, then the home owner or the applicant of the loan can also ask for coverage of the rent for up to six months.
The funds are placed in an escrow account and released whenever the contractor demands the payments. Therefore it is vital to find a contractor who not only knows how the 203(k) loans work but is also a good contractor who can finish on time.
Standard 203(k): Extensive Work
Properties that require extensive work are issued with a loan under the standard 203(k) program. There is no maximum capped cost of repairs, this program includes repair work for plumbing, flooring, painting, temperature control systems, remodeling and landscaping. However, luxurious renovations and improvements are not covered under this loan.
The downside to 203(k) loans is that they are not exactly the most affordable option out there, there is a considerable mortgage premium and service fee involved but because they are government backed makes them better than other loans available through private lenders. There is also a lot of paper work and waiting time involved.
A Property Assessed Clean Energy (PACE) loan was launched in 2010 under the umbrella of the United States Department of Energy (DOE), it is a special loan that is available for homeowners who are looking to make major changes to their homes in order to make them more energy efficient or to put in place renewable energy equipment to increase the efficiency of energy consumption of the homes. This loan is available for commercial, residential and industrial properties.
PACE loan can be used make homes earthquake proof, to install hurricane proof equipment, solar panels or boilers, energy efficient roofing and LED lights to reduce energy consumption. The PACE loans do not have any down payment, the underlying property serves as collateral for the loan, there are no monthly repayments of the loan instead the loan is repaid through addition to the property tax after assessment of the property in every period.
PACE loan does not require any under writing process and usually 100% of the required funds are available for finance.
Rural Housing: Housing Repair Loans and Grants
Also known as Section 504 Home Repair program this program provides funds in the form of loans and grants for very low income earning home owners to repair, improve, maintain or modernize their homes located in rural areas. The loans have a term of up to 20 years; this makes then long term loans. The loans carry a very low rate of interest at 1%, thus the loans are extremely affordable because they are for very low income earning families.
For applicants above 62 years of age, the program offers grants to the same effect. For applicants who can pay a part of the loan, a combination of loan and grant can be issued as well, depending on the ability to repay.
The loams can be for amounts up to $20,000 and the grants can be for amounts up to $7,500. Loans and grants can also be combined for amounts up to $27,500.
You can click here to go to the web page of USDA to access the application forms and other resources that you may need to apply for the housing repair loan.